Tuesday, December 17, 2013

In a truly free marketplace,
private parties have the liberty to pursue commercial deals with whomever they
choose. By mutual consent, private parties operating in a free market are at
likewise at liberty to bind themselves to negotiated terms and conditions. The
parties must abide by the terms and conditions they’ve agreed to. And an
impartial authority enforces the bargained-for expectation of the parties in
cases where one side fails to perform as agreed.

Unfortunately, video
programming services remain stuck under a decades-old legacy regulatory
apparatus that in certain critical respects marks an unfree market. The
retransmission consent and must-carry regulatory regime established by Congress
and enforced by the FCC is a regrettable case in point.

For over 20 years now the retrans
consent/must carry regime has subjected the market for video programming to
forced access mandates and to restrictions on private bargaining. Under
"must-carry" rules, video broadcasters are granted special rights
against multichannel video programming distributors (MVPDs), such as cable and
direct broadcast satellite (DBS) operators. Those rules allow broadcasters to compel
carriage of their program content by an MVPD on a basic tier channel.

On the flip side, TV broadcasters
can chose to forego their must-carry rights and instead require that MVPDs
negotiate directly with them for permission to retransmit their video
programming. But retrans consent regulations grant protections to broadcast
networks and local stations by limiting the ability of cable operators to
choose what broadcasters to bargain with and what programming to bargain for.
In particular, network non-duplication rules block MVPDs from importing network
programming from another affiliate of the same broadcast network as a
designated local TV station, even if the local TV station is not carried by the
MVPD. And syndicated exclusivity rules block MVPDs from carrying syndicated
programming broadcast by out-of-market TV stations when the same programs are
broadcast by local TV stations.

FSF Board of Academic Advisors
member Bruce Owen recounted the history of political favoritism and
protectionism behind retrans consent and must carry in his Perspectives from FSF Scholars paper, "The FCC and the Unfree Market for TV Program
Rights." And in a Perspectives paper titled "Broadcast Retransmission Negotiations and
Free Markets," FSF
President Randolph May concluded the retrans consent regime "creates artificial constraints that make the
negotiations anything but a free market situation" and has "the
effect of conferring certain advantages that may work to the negotiating
advantage of broadcasters and against the MVPDs."

Now in a December
12 blog post at RedState, CEI's Fred Campbell took aim at the American
Television Alliance's (ATVA) 2010 petition requesting that the FCC adopt
certain retrans consent negotiation and dispute resolution rules. In so doing,
he likened ATVA's efforts to obtain such retrans consent regulations with the
efforts of pro-regulatory advocates to impose network neutrality regulations.

Fred Campbell is a former FCC Wireless Bureau Chief, a skilled
analyst, and, in general, a free marketer. We at FSF are in considerable
agreement with him on many communications policy issues and respect his work. But
I believe a false equivalency has been made in his blog post between rules that
modify an existing regulatory regime for one type of services and rules that
subject a previously free market to new regulatory controls.

Even if the FCC never acts on ATVA's petition, video
programming negotiations between TV broadcasters and MVPDs are already un-free
in significant respects. This is due to the 20 year-old restrans consent
regulations, discussed above, that restrict who MVPDs can negotiate with. By
contrast, prior to the FCC's Open
Internet Order, broadband Internet access providers were free, if they
pleased, to negotiate with content or "edge" providers regarding data
transmission. The FCC's net neutrality regulations now restrict – or at least
disfavor – certain kinds of two-sided pricing arrangements that may be consumer
welfare-enhancing.

Surely there may be costs associated with all of the various
proposals contained in ATVA's petition, just as there may be benefits
associated with them. I leave the merits of ATVA's various proposals to others.
The real focus should be on the more fundamental task of establishing a truly
free market context for retrans consent negotiations, and for video services
generally. The ultimate goal should be to eliminate regulatory intrusion in
this space – and to thereby eliminate occasions for debate over whether this or
that particular modification to the old regulations will tip the scales in
favor of one class of competitors over another.

One promising vehicle for comprehensive free market reform is H.R. 3720, the Next
Generation Television Marketplace Act. Just introduced again by Congressman Steve
Scalise, the bill would finally eliminate outdated legacy video regulations
that rest on an early 1990s snapshot picture of the video market. Among other
things, the Next Generation Television Marketplace Act would repeal retrans
consent regulations and allow negotiations for carriage of TV broadcast
stations to take place in a deregulated and truly free market context.

Perhaps
Fred Campbell may agree with me that this would be a good thing and that Rep. Scalise's "NextGenTV" bill represents the proper direction for reform.

Two developments last week caused me (regretfully) to
refocus on the Federal Communications Commission's ill-begotten special access
proceeding. I say "regretfully" because it is one of those
never-ending, backward-looking FCC proceedings
that make you cringe. But like Ol' Man River, the proceeding just keeps rolling
along.

It has been more or less a decade, depending on how you
count, since the FCC embarked on a quest to determine whether what the FCC
calls "special access" services are priced unreasonably (read: "too
high" to the FCC's mind) by what are still called the "incumbent"
telephone companies, even in today's competitive telecom environment.

Back during the years of the Clinton Administration's FCC
the agency had relaxed its regulation of special access rates after finding the
services were subject to competition in certain geographic areas. The FCC's
current proceeding is all about whether to re-regulate rates.

Trust me: The years-long quest upon which the FCC has been embarked
to determine whether special access rates are "reasonable" makes Don
Quixote's quest look like child's play.

And trust me on this too: The special access proceeding is a
special debacle in the making – unless the proceeding gets shut down. In a blog
published in June 2012 called "Special
Pleading for Special Access Is Especially Counter-Productive," I said:
"There are other candidates, but if one is
looking for an indictment of what is wrong with the FCC's approach to
regulation, there is no need to look further than the agency's handling of
'special access' services." Still true today, perhaps more so.

For anyone reading this not steeped in FCC regulatory
lingo, you might be wondering what the heck is "special access,"
anyway. Here's the FCC's official definition:

"Special access
services encompass all services that do not use local switches; these include
services that employ dedicated facilities that run directly between the end
user and an interexchange carrier’s (IXC) point of presence, where an IXC
connects its network with the local exchange carrier’s (LEC) network, or
between two discrete end user locations."

Translation: Special access
services are dedicated circuits not used by ordinary residential consumers, but
rather by businesses and carriers other than the telephone companies offering
the services. The majority are copper-based TDM circuits with a T-1 (1.5 Mbps)
capacity, but they also include TDM T-3 (45 Mbps) capacities as well.

Now back to last week's two developments.
The National Cable & Telecommunications Association (NCTA) filed an Application for
Review asking the FCC to curtail substantially
the proceeding's currently-applicable data collection requirements. NCTA says
that, in formulating the data collection mandates, the FCC's staff has
"ignored critical concerns regarding the security of network maps and
detailed customer proprietary network information (CPNI)." It's hard to
believe, but the FCC's data collection mandates require every provider of
special access or special access-comparable services to give the Commission all
information concerning every circuit in the country. This includes every
building location served by every provider.

Here is what NCTA says about
the mandate in its application:

"The data
collection punishes the very companies that are investing private capital to
finally bring widespread competition
to the special access marketplace. Cable operators are making significant investments to provide
commercial customers with services that are more robust and less expensive than
the services offered by incumbent providers, a result that the Commission
has long encouraged through its limited regulation of competitive providers.
Yet these same companies, which have never been subject to any recordkeeping or
reporting obligations with respect to their competitive special access
services, are now expected to devote thousands of hours and tens of millions of
dollars to gathering virtually every
scrap of information about the commercial services they provide (or could
provide), the networks they operate, and the customers they serve (including
detailed CPNI regarding every business in America that purchases dedicated
services)." [My italics.]

There is more
along these lines in the NCTA pleading, but the import of NCTA's plea should be
clear. First, the prospects for the FCC ever gathering all, or even most, of
the requested data are close to nil. It is simply unrealistic to think that all
special access or special access-equivalent service providers are going to be
able to provide information concerning every customer they serve in every
location in America, even if they wanted to – and, let's be honest, they don't
want to. They will resist, in ways subtle and not so subtle, disclosing what
NCTA, rightly, calls competitively "sensitive information."This data
collection and analysis effort, if it goes forward, almost certainly will end
up a huge mess. And, as NCTA correctly points out, even assuming for the sake
of argument the FCC "possibly could complete" its data collection and
analysis in 2015, "such analysis will be out of date immediately upon its
release because the data the Commission is collecting is from 2010 and
2012."

Second, as
NCTA's pleading makes clear, cable companies are investing significant amounts
of private capital to compete in the special access marketplace, investments
they claim will bring widespread competition to this market segment. They should
be commended for these investments, and, indeed, the cable operators are by no
means alone. All of the other service providers that, along with NCTA, have
also protested the breadth of the FCC's data collection requirements are, by
self-admission, competitors as well. These other competitors include, for
example, established companies such as Level 3, XO, and Cogent, and fiber
providers. In addition, Sprint conducted an RFP for backhaul services and
received responses from more than 20 different vendors.

Third, and this
is a point that the Commission often fails to appreciate: Assuming for the sake
of argument the Commission would prefer for the special access market to be
more competitive than the agency assumes it is, and assuming, again for the
sake of argument, that the agency somehow could complete its data collection
quest on a timely basis and conclude the incumbents' special access rates
should be reduced by Commission fiat, the effect of this mandated rate
reduction actually would be to deter the development of further
facilities-based competition – competition that, in any event, already is progressing.
This is because, by forcing the incumbents' rates down, it is more difficult for
other competitors to compete. If the cable operators and other facilities-based
providers conclude the FCC will be forcing down incumbents' rates, it is less
likely these competitors will continue, in NCTA's words, "making
significant investments to provide commercial customers with services that are
more robust and less expensive than the services offered by the incumbent
providers."

The reality is
this: It is no doubt true that in some locations there is more competition than
in others. Certainly there are many particular buildings across the country that,
presently, are served by only one provider. But surely this is largely
irrelevant unless the FCC proposes to regulate rates on a building-by-building
basis. The agency's quest to gather information for all building locations in
the country is a fool's errand. What is important is the unmistakable,
long-term trend towards more competition and more choices for consumers in most
locations – a trend enabled and furthered by the deployment of lower-cost, more
efficient digital technologies.

Now, it is the
deployment of newer, more efficient IP technologies that brings me to the
second of last week's developments. The Commission's staff suspended and set
for investigation AT&T special access service tariff filings proposing to
eliminate for any new customers or
existing customers placing new orders
certain discount plans with terms of sixty months or greater. AT&T said the
purpose of eliminating such discounts for far-out years (i.e., 2020) is to
prepare for the transition to an all-IP network. Recall that the incumbents'
special access services are, for the most part, legacy copper-based circuits.

The FCC's
action was a mistake, and it leaves one wondering whether the agency has any
appreciation at all of the way its actions can adversely affect the transition
to all IP networks that enable less costly, more efficient services. After all,
here the tariff revisions simply proposed eliminating discounts for new
customers and new orders. No one contends – I don't think even the FCC contends
this – that AT&T or any other carrier could be ordered, in the first place,
to offer specific long-term discount plans.

I'll conclude by repeating yet
again what I said in my June 2012 "Special
Pleading for Special Access"blog: "There are other
candidates, but if one is looking for an indictment of what is wrong with the
FCC's approach to regulation, there is no need to look further than the
agency's handling of 'special access' services."

The Commission needs to
reorient its pro-regulatory mindset in a meaningful way. As I have often urged,
and as I did so again recently in an ex parte filing
regarding the IP Transition, in today's rapidly changing digital environment,
the agency's "default, or presumptive, position should be that, absent
clear and convincing evidence to the contrary, legacy economic regulation
should not be applied."

Friday, December 13, 2013

On November 22,
Susan Crawford participated in a teleconference
in which she discussed marketplace competition and her book, “Captive
Audience: The
Telecom Industry and Monopoly Power in the New Gilded Age.” Professor
Crawford asserted that the U.S. market for broadband services is dominated by
cable TV companies. She stated that consumers only have a choice of about 1.5
competitors, and that competition should be measured based on the market for
the choice-limiting “bundle” of video and data services. When asked about
statistics that seem to prove that competition is healthy and increasing,
Professor Crawford stated that companies like AT&T are good at “shaping the
numbers to make it appear like competition is right around the corner.”

Today, many
statistics demonstrate that the broadband market is effectively competitive. Also,
recent technological innovations and trends in consumer habits indicate that
“the bundle” is not the only market relevant to analyzing the state of
broadband competition. Broadband services are currently offered by many
competitors that include cable, telephone, and satellite companies alike. In
addition to a variety of service providers, consumers can also choose from a
range of subscription options and modes of access to content. Although some
obstacles to broadband innovation and investment may remain, the U.S. offers
broadband access
and a choice of providers to most consumers and leads
the world in many measures that are indicative of broadband leadership.

Despite its
curious failure to determine that the broadband market is effectively
competitive, in the FCC’s most recent 706 Report, the Commission found
that the broadband “market has responded” to consumer demand for increasingly
fast Internet services. The report notes that “recent trends show [broadband] providers offering much higher
speeds” and increasing data limits for customers. Mobile broadband providers
have expanded their coverage, and are “deploying faster, and more
spectrally-efficient mobile network technologies.” Yet there are several remaining barriers to infrastructure
investment including costs and delays in building out networks, broadband
service quality, lack of affordable broadband Internet access services, lack of
access to computers and other broadband-capable equipment, and a lack of relevance
of broadband for some consumers.

Although there
may be some remaining obstacles to broadband deployment and adoption, the
communications and information services marketplace today offers many consumers
access to high-speed broadband services at affordable costs. Additionally, consumers
may subscribe to broadband not only through their local cable providers, but
also through phone, satellite, or Internet providers.

In her book Captive Audience, Professor Crawford
asserts that Comcast possesses monopoly power with respect both
to the provision of broadband services and the provision of video programming.
In the recent teleconference, Professor
Crawford seemed to argue that cable companies, particularly Comcast, dominate
the broadband market because they have a price advantage in obtaining video
programming for “the bundle.” However, companies other than cable providers are
quickly gaining traction in the video marketplace. For example, companies like
AT&T and Verizon now offer video services in addition to phone service and
Internet service. According to Professor Crawford, being able to compete in the
video market enhances the ability of companies to compete with cable companies
in the broadband services marketplace. Following this line of reasoning, since
companies like AT&T and Verizon are competing with cable providers in the
video marketplace, they are also competing with cable providers in the
broadband marketplace, which means that the broadband market is not
monopolistic.

Looking more
specifically at the video marketplace, the Wall
Street Journalreported in November that Verizon and AT&T “are nearing the market share of cable operators in areas
where they operate.” The top two cable providers, Comcast and Time Warner
Cable, shed 435,000 video customers in the quarter, while AT&T and Verizon
added 400,000. Verizon and AT&T are not the only companies competing with
cable providers in the video marketplace.

The FCC’s 15th Annual Video Competition Report
provided more evidence of a marketplace in which consumers have a choice of
service providers and modes of access to content. By the end of last year, cable providers represented only 55% of
the more than 100 million households that subscribe to all multichannel video
programming distributors (“MVPDs”) overall. Meanwhile telephone and direct
broadcast satellite MVPDs gained marketshare, claiming about 8.4% and 33.6% of
all MVPD subscribers respectively. At the end of 2012, 98.6% of subscribers or
130.7 million households had access to at least three MVPDs, 35.3% or 46.8
million households had access to at least four, and some areas had access to as
many as five MVPDs.

In addition to this variety of
service providers, consumers today can also access content through a greater
range of technologies and subscriber options than ever before; bundled service
subscriptions are just one option available and may not provide a proper
measure of the broadband services market overall.The FCC’s
15th Annual Video Competition Reportcited an SNL Kagan study, which estimated that
by the end of 2012, there would be 41.6 million Internet-connected television
households, representing 35.4% of all television households. The FCC’s 15th
Annual Reportalso noted the continued
growth of non-cable MVPDs, rapid deployment and adoption of other new
technologies that enable time and space shifting, and other developments that
offer further options for consumer viewing.

Furthermore, consumers today can access video content through a wide
range of devices, not just through set top boxes leased by cable providers as
part of a “bundle.” Video access devices available today include IP connected
MVPD provided set-top boxes, multi-room DVR and home networking solutions,
cloud-based user interfaces, mobile applications, portable media players,
gaming consoles, Internet-connected smart phones and table computers, and home
monitoring systems that act as extensions of cable MVPD networks.

Today’s video marketplace offers
consumers a choice of providers, subscription options, and devices. Subscribing
to a “bundle” of video and data services offered by cable providers is not the
only way to access video content anymore. The implications of this marketplace
development are that cable providers likely do not have an advantage in the
broadband market because other companies now offer video services, and can
compete directly with cable providers for “bundle” customers.

Additionally, innovative modes of
access to content and changing viewer habits also indicate that not all
consumers prefer the cable “bundle” of video and data services: high-speed broadband
access to over-the-top content may be enough for some consumers today. As the Wall Street Journalobserved, the growth of telecom’s share of the video
market is already having a significant impact on the cable industry, and
offering high-speed broadband services will be the way to maintain subscribers
given these changes. Thus, cable, telecom, and satellite providers must compete
in the broadband marketplace to adjust to these developments, and the Wall Street Journal’s recent statistics indicate that such competition is
currently underway.

Free State
Foundation scholars have often analyzed the state of the communications and
information services marketplace to respond to Professor Crawford’s arguments
that the broadband market is not competitive. Recently, Free State Foundation
President Randolph May posted a “Message
for Susan” on our blog. That piece presented recent statistics, which
demonstrate that the cable market is effectively competitive, and not
monopolistic. And by definition, Mr. May found that the same is true for the cable
operators' competitors, AT&T, Verizon, and all the other broadband
providers, including the various wireless and satellite operators. Mr. May urged Professor Crawford to stop
branding Comcast and other cable operators
"monopolies," and to stop calling for regulation of broadband companies
as utilities like electric power companies, which by and large continue to
retain dominant market power.

“Captive
Audience" is flawed because Professor Crawford relies on an incorrect –
indeed, a hypothesized – view of the communications and information
services marketplace to construct the case for monopoly power. And then she
offers anachronistic, legacy regulatory measures to remedy the supposed ills
that exist in her hypothesized market.

In the recent teleconference,
Professor Crawford again seemed to look at too narrow a market to draw
conclusions about the overall state of competition. Rather than analyzing the
state of the cable market based on “the bundle,” any assessment of the
marketplace should be informed by the vast range of service providers,
subscription plans, technologies, and content provision platforms available to
consumers today. Recent statistics and articles, and the continued innovation and growth in the cable
marketplace indicate that there is effective competition – not monopoly power
in this market.

Of course there may be weak spots in an
otherwise generally competitive market. As the FCC’s 706 Report pointed out, not all Americans currently have access to high
speed broadband. However, the U.S. leads Europe in broadband progress, and offers broad choice to consumers in the cable and video
marketplaces.
Additionally, cable and telecommunications providers lead capital
investment in the United States;
AT&T, Verizon Communications, Comcast, Sprint Nextel, and
Time Warner, all ranked in the top twenty of non-financial
companies making capital investments in the U.S over the past year. The
investments of these companies, among others, have allowed 99.5% of Americans
to have access
to broadband – via landline, wireless, or both – as of the end of 2012.

These successes and other positive
digital economy developments may be threatened if burdensome public
utility-style regulations are implemented. As the Commission noted in its 706 Report, the broadband market in particular is responsive to
consumer demands and is constantly evolving to improve weak performance areas. Critics
should listen to Randolph May’s “message”: “It's no time to let captive thinking premised on a
hypothesized market trump the competitive realities of the broadband
marketplace. If such thinking ever were to lead to regulating broadband
providers as public utilities, rest assured that consumers would be the real
losers.”

Thursday, December 12, 2013

Today
the FCC will be considering issuing a proposal that seeks comment on the
Commission’s rules regarding the use of mobile wireless services onboard
aircraft. In my view, the proposal to seek public comment should be adopted.

As
reported in today's Washington Post, the announcement by the FCC's new Chairman a
couple of weeks ago that the agency would issue the notice seeking comment on a
rule change that might lead to in-flight cellphone use has drawn a lot of public
attention, both positive and negative. This is not surprising given the strong
feelings of consumers concerning the use of cellphones in flight. Some consumers
reacted positively to the prospect of allowing in-flight calls and wireless
services, while others criticized the idea.

Those
who interpreted the FCC’s announcement as permitting passengers to make voice
calls in-flight should relax. The so-called Notice of Proposed Rulemaking will
not itself allow in-flight calls. The NPRM will merely seek public comment on
proposed revisions to the Commission's rules to begin the process of considering
whether any changes in the on-board wireless device use policies are warranted.
The NPRM likely will also announce the Commission’s tentative decision to give
airlines discretion to determine whether and how to provide and manage on-board
wireless services, given the FCC's determination that “there is no technical
reason” to prohibit on-board use of mobile devices.

If it is
true, and I await public comment on the issue, that there is no technical
reason from a spectrum management or spectrum interference point of view for
the FCC to prohibit on-board wireless use, then, from my free market-oriented
perspective, giving airlines discretion to determine policies governing in-flight
wireless services is an appropriate way to approach the issue. The FCC has technical
expertise regarding resolving concerns about spectrum interference issues, and
it is appropriate for the agency to address those concerns utilizing its
expertise. But, at the same time, absent any concerns that on-board wireless
use poses spectrum interference issues that compromise airline safety, I don't
see it as the FCC's role to dictate how the airlines run their operations with
respect to passenger conduct.

If the
FAA believes that the in-flight use of cellphones may compromise the safety of
airline operations because cellphone use is likely to cause disruptions due to
unruly passenger fights, the FAA may well have a role to play. Perhaps other
federal agencies may have a role to play as well. And, most importantly, as I
understand it, nothing in the FCC's proposed rule would require airlines to
allow in-flight cellphone use. That decision would be left to the airlines
themselves based on their own perceptions concerning the demands of consumers
in the air travel marketplace.

When the
FCC's new Chairman, Tom Wheeler, announced a few weeks ago that the FCC would
be considering this change, he said: "I do not want the person in the seat
next to me yapping…But we are not the Federal Courtesy Commission." I
agree with Mr. Wheeler on both counts.

At the
end of the day, I personally hope the airlines don't allow in-flight cellphone
use, or at least certainly not in an unrestricted way that is likely to cause
widespread passenger irritation. But, at the same time, as someone who has
argued for a very long time that the FCC over-regulates and meddles in matters
that ought to be left to the judgment of those businesses it regulates, sometimes
to the point of counterproductive micro-management, I am with Mr. Wheeler on this one.

There
will be time enough to be critical when the new Chairman proposes new
regulatory measures that shouldn't be adopted. This is a deregulatory one that
at least should be considered.

Wednesday, December 11, 2013

Today, CTIA and
seven of the largest wireless companies in the U.S. expressed strong support
for the
Permanent Internet Tax Freedom Act. Collectively, CTIA and those
major carriers serve more than 95 percent of America’s 325 million wireless
subscribers. In a letter
to Chairman Bob Goodlatte, who co-sponsored the bipartisan bill with
Representative Anna Eshoo, the wireless industry leaders urged Congress to
enact the
Permanent Internet Tax Freedom Act before the current moratorium on
Internet access taxes expires on November 1, 2014. The proposed legislation would
make the current ban on Internet access taxes permanent.

As I discussed
in my October 15 Perspectives,
Internet access has remained essentially free from tax burdens
due to the Internet Tax Freedom Act of 1998,
which prohibited any state or political subdivision from imposing Internet
access taxes. Since
its enactment, the Act has contributed to nearly 15 years of economic growth and
Internet investment, development, and adoption.

By enacting the Internet Tax Freedom Act of 1998,
Congress recognized the importance of facilitating Internet access, and made it
more affordable for consumers to go online. Failure to ban the imposition of
taxes on Internet access will deter investment, slow innovation, and impose
unnecessary costs on consumers.

The Permanent Internet Tax Freedom Act
offers an opportunity for Congress to act in a bipartisan way on an important
matter for the benefit of all Americans. It is noteworthy that the largest
wireless carriers in the country signed the letter
sent to Congressman Goodlatte by CTIA. Although the large carriers who signed
the letter often disagree on other issues like spectrum management or auction
rules, AT&T, Verizon, Sprint Nextel, T-Mobile, U.S. Cellular, Cellcom and
Bluegrass Cellular expressed their united support for a permanent moratorium on
Internet access taxes.

The enactment of a permanent ban on Internet access taxes
provides one way to help ensure continued affordable access to this important
resource, as well as to promote U.S. leadership in the global economy and the
economic success of the digital marketplace.

Thursday, December 05, 2013

Randolph May, President of the Free State Foundation
and a Public Member of the Administrative Conference of the United States
(ACUS), is participating in the ACUS 59th Plenary Session today and tomorrow,
December 5-6, 2013, in Washington, DC.

ACUS
is an independent federal agency tasked with promoting improvements in the
efficiency, adequacy, and fairness of the procedures by which federal agencies
conduct regulatory programs, administer grants and benefits, and perform related
governmental functions. The ACUS
membership is composed of federal officials and experts with diverse views and
backgrounds from both the private sector and academia.

Yesterday, the FCC's International Bureau approved Verizon's
buyout of Vodafone's stake in Verizon Wireless. It did this applying the FCC's
new foreign ownership rules that are intended to reduce processing delays and,
at the same time, stimulate foreign investment in the U.S.

The Commission, under new Chairman Tom Wheeler's
leadership, deserves credit for acting quickly on Verizon's petition seeking
approval of the buyout. To be candid, there was no legitimate reason for the
Commission not to act quickly. But many times in the past, even absent
legitimate reasons for delay, there still have been undue delays – many beyond
"undue" – in acting on transaction reviews.

If the FCC's relatively quick action is an indication that
Chairman Wheeler intends to speed up transaction reviews, then I certainly applaud
him for it because, as I have long argued, the pace of marketplace change often
outruns the pace of FCC decisionmaking.

For almost fifteen years, in a pretty steady drumbeat, I
have been critical of the FCC's abuse of its transaction review process,
especially the way the agency often uses the review process to extract
conditions from the applicants unrelated to the impacts, competitive or
otherwise, created by the transaction. You can read the first Legal Times piece, "Any Volunteers?"here.
In the instance, in addition to acting without undue delay, the Commission did not
use the transaction review process as an opportunity to apply any such
unwarranted conditions.

So, while the Verizon-Vodafone transaction is by no means
a good test of how the agency will handle other, more controversial
transactions, nevertheless I am happy to credit Tom Wheeler and his team for getting
off on the right foot in the handling of this particular transaction.